In a draft report on long-term financing, the European Parliament recognises the importance of securitisation and calls for a definition of “high quality securitisation”

In its draft report on long-term financing of the European economy the European Parliament’s Committee on Economic and Monetary Affairs has made key positive statements regarding securitisation and called for a definition of “high quality securitisation”. In particular, the report stated: the Committee “believes that securitisation can play an important role in financial intermediation; encourages efforts to securitise high-quality assets while avoiding structures of high complexity; notes that there is scope for more standardisation and transparency; calls on the Commission to follow closely the activities of the International Organisation of Securities Commissions-Financial Stability Board working group on securitisation and to develop a definition of ‘high-quality securitisation’” The Committee also welcomed the Commission’s request of EIOPA to revisit certain calibrations that would impede long-term finance. Finally, the Committee called “on the Commission to assess carefully the cumulative impact of already concluded and ongoing financial regulation of long-term investment” reflecting a concern regarding the cumulative unintended consequences of regulatory proposals and rules on the European economy.

Reflecting many of the key positions of PCS, especially in the call for a definition of “high quality securitisation”, this report marks an important contribution to the debate on long term funding of the European economy. The full draft report may be found here.